China Services Growth Near 2-Year Low

The RatingDog China General Services PMI declined to 50.4 in July 2026 from 54.1 in June, falling below market forecasts of 53.7. It was the slowest expansion in services activity since September 2024 as new business growth moderated for the second straight month, easing to a four-month low amid softer domestic demand. However, new export orders rose for the third consecutive month, supported by stronger overseas demand. Employment rose for the third consecutive month, though at a slower pace than in June. On the price front, input costs increased due to higher labour, raw material, advertising, and diesel costs. However, input cost inflation eased to a six-month low. Meanwhile, output prices continued to rise, marking the first back-to-back increases in the sector in a year and a half, driven by higher operating expenses, oil prices, and insurance premium changes. Finally, business sentiment fell to its lowest level since February 2020.

The RatingDog China General Services PMI declined to 54.1 in June 2026 from May's three-month high of 54.4. However, the latest reading exceeded market forecasts of 53.0 and pointed to the third-steepest increase in services activity in nearly three years, supported by domestic demand. Meanwhile, new export business expanded for the second consecutive month and at the fastest pace since October 2024. Employment increased for the second consecutive month, marking the first back-to-back increase since 2024 and the fastest rise since July 2024. On the price front, input costs rose due to higher labour, raw material, and transportation costs. However, input cost inflation eased from May's 19-month high. Meanwhile, output cost inflation accelerated for the first time in four months, the highest level in more than two years. Looking ahead, business sentiment remained positive and broadly comparable to that seen in May.

The RatingDog China General Services PMI increased to 54.4 in May 2026 from 52.6 in April, surpassing forecasts of 52.3. It marked the strongest growth in the services sector since February, as new orders rose at the fastest pace in three months, while export orders increased following slight declines in the previous two months. However, growth in foreign sales remained softer than domestic demand. Employment increased for the first time in four months, with the pace of job creation exceeding that recorded in January. On prices, input price inflation accelerated to its highest level since October 2024, driven by higher fuel prices and wage costs. Output price inflation was broadly unchanged, with cost pressures increasing but remaining below the long-run survey average. Lastly, sentiment improved to a three-month high, supported by improving market conditions, a brighter economic outlook, business development initiatives, increased client demand, new projects, and new business lines.